Although certainly better than jail, the hotel is a one-star building located in an industrial zone on Madrid's southeastern suburbs, surrounded by factories but no shops.
Single rooms costing euro 25 ($31) a night have metal lockers instead of wardrobes. Each floor has shared men's and women's bathrooms.
It was not known who selected the accommodation or how long the Cubans would stay there.
Spain's Foreign Ministry said the Cubans would have legal immigrant status with residency and work permits that allow them to live in Spain and travel freely.
The ministry said they would not be treated as refugees or citizens in exile.
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